Hospital, officials pleased with hospital's structure

Sunday

May 18, 2008 at 12:01 AM

The event was a wake up call for medical professionals in Western NorthCarolina. In February, after failing a series of inspections, Haywood RegionalMedical Center lost its Medicare and Medicaid funding, a major source ofrevenue for hospitals.

By James Shea Times-News Staff Writer

The event was a wake up call for medical professionals in Western North
Carolina.

In February, after failing a series of inspections, Haywood Regional
Medical Center lost its Medicare and Medicaid funding, a major source of
revenue for hospitals.

Speaking to county commissioners, Henderson County resident Fielding
Lucas recently pointed to the situation at Haywood Regional as a reason to
increase governance at county-owned Pardee Hospital in Hendersonville.
But the hospital administration and county believe processes are in place
to prevent a similar event here.

The structure

Haywood Regional and Pardee have similar governance structures. County
commissioners appoint members to a hospital board, which provides oversight
at the hospital. The role of the hospital board is to question and
challenge the hospital CEO about quality control and the financial
situation at the hospital.

A consultant told Haywood County commissioners their local hospital fell
onto hard times in part because of a failure of leadership.

Dr. Kate Fenner of the Compass Group told commissioners that Haywood
Regional’s former CEO did not provide orientation opportunities for board
members, so they did not know what information they should request or
demand, minutes from a March 7 special meeting show.

Employees were not permitted to speak with board members without going
through the CEO on threat of being fired, the consultant reported.

“I think it was management, and in particular the CEO,” said Larry
Ammons, chairman of the Haywood County commission.

He added, “Power had gravitated to him and the hospital trustees were not
told about the problem.”

The CEO, David Rice, did not tell anyone about the inspection or the
consequences of failure, and the hospital board and the county
commissioners were caught off guard when de-certification happened,
Ammons said.

Pardee Hospital CEO Kris Hoce said he has followed the situation at
Haywood Regional. He said he wants to make sure structures are in place to
prevent a similar event from occurring at Pardee.

“Certainly it is tragic for Haywood community hospital to go through
these experiences and lose its Medicare certification,” Hoce said. “We
talked about it here and it was a teaching and learning experience. You
learn from what was the process that occurred that led to that. And you
certainly measure yourself against that process.”

He said he and his administrative team downloaded the report that led to
de-certification. They studied the processes and procedures at Haywood,
making sure they were different at Pardee.

“We were comfortable that our structure, processes and procedures provide
the necessary oversight, and checks and balances to ensure we didn’t run
the risk of this being part of our normal delivery model,” Hoce said.
Criticism

Lucas, who often attends Pardee board meetings, sees a lot of
similarities between Haywood Regional and Pardee.

He has suggested structural changes to the board of commissioners, but he
does not feel the board is doing anything.

Lucas said the hospital is a vital asset to Henderson County, and he
believes county commissioners should take an active role on the hospital
board.

Henderson County Board of Commissioners Chairman Bill Moyer sits as a
non-voting member on the hospital board.

He can engage in discussions but has no vote in decisions. Lucas suggests
that commissioners appoint one of their own to an open spot on the board,
making them a full-fledged member.

“They don’t seem to have accepted the fact that this could happen here
too,” Lucas said.

Pardee is one of the largest employers in the county, and commissioners
must take a vested interest in the institution, Lucas said.

The 13-member Pardee board includes three members with medical
backgrounds. The remaining membership includes prominent business people
with backgrounds in banking, engineering, small business, real estate and
law.

“There has been a lean toward more business people,” Lucas said. “But
none of them have run a $130 million business.”

Lucas said the problems at Haywood Regional had a ripple effect.
Once the hospital lost its certification, Blue Cross and Blue Shield
insurance pulled out. Now, the hospital has virtually no revenue coming in
and has recently announced layoffs.

“These things happen like an earthquake,” Lucas said.

Hoce said he believes the current role of the board of commissioners and
the hospital board is well defined and the proper structures are in place.
He said commissioners have selected the right people and he is not sure if
adding more control by the commissioners is the answer.

“I’m not sure where that would add value,” he said. “The commissioners
have been very deliberate in the board members they appoint to this board
that have that expertise.”

Hoce said the board comprises smart, knowledgeable people. He said the
board chairman, Bill Smith, is a former executive at a manufacturing
company and understands quality control processes. Smith is a retired
senior director for ArvinMeritor in Fletcher.

“I think the effort (the commissioners) have made in the last couple of
years to ensure that this board has the right type of people on it has been
very, very effective,” Hoce said. “The commissioners in my year have been
very purposeful about determining what the needs of the hospital are, from
a governance perspective, and gone out and tried to find people in the
community that have those effective skills and expertise.”
Moyer agrees.

He does not believe the commissioners need to increase control of the
hospital board.

He said Hoce and the board have made great progress and he trusts them to
make the right decisions.

One accusation surrounding hospital boards is they “bring in a strong
CEO, and they would basically not want to be
challenged by the board. Not want questions. And we had some of that
here,” Moyer said. “We don’t have that anymore. The board with Kris is
great. I feel confident in Kris as CEO. I think he looks favorably on
questions from the board.”

Lucas hopes county commissioners change their mind in the future, but he
said he knows he is fighting an uphill battle.

Ammons said he has heard accusations that the hospital board at Haywood
Regional was an honorary position and members did not take the job
seriously.

But Ammons said he does not believe it is the case. He said everyone on
the board is a good member of the community and takes the job seriously.
“Nobody has every identified who these folks were,” Ammons said. “I have
not found anybody who was not smart and willing to do the job.”

Moyer said he believes the commissioners are very selective about who is
appointed to the Pardee board. Each applicant applies to the commissioners
and goes through an interview process. Moyer said the commissioners are
often looking for a specific set of skills when they fill a spot on the
hospital board.

“I can tell you my position, and I think it is at least the view of two
of the other commissioners, that our role is to recognize the
importance of the hospital and make sure we appoint people that have the
time, talent, interest, to be effective board members,” Moyer said. “We
shouldn’t be putting our friends on. We shouldn’t be putting on political
allies or people that we want to honor. These have to be positions, in
today’s hospital board, that have to be working positions.”

Hoce said he has a good relationship with the board. He believes members
are engaged and willing to do the work necessary to learn the job. He said
he is in constant communication with board members, and they are informed
any time an inspection takes place at the hospital.

“It is pretty much transparent and full disclosure,” he said. “When I
came here, the board made it very clear that was the type of relationship
they were looking for with the CEO. I made it very clear that that was the
type of relationship I wanted with the board. I think we have gone out of
our way to make sure our board is kept informed on anything that is
pertinent around here.”

Lucas said he has seen the board appointments get better in recent years,
but still believes the process can improve.

Open environment

Haywood County commissioners heard their local hospital had “an
atmosphere of intimidation and control,” according to minutes from the
March 7 meeting. Communication was tightly controlled and monitored, the
consultant reported.

Hoce said he operates in an open environment and does not want people to
be afraid to make suggestions.

The hospital has a hotline where employees can call to make anonymous
complaints. Hoce said he walks the halls of the hospital several times a
week, making sure employees feel comfortable talking with him and the
administrative team.

“We go out of our way here to have a culture of disclosure,” Hoce said.
“We encourage people to disclose breakdowns, because that is the only way
you are going to get better. We take a non-punitive approach… we view it as
a learning process for us to get better.”

Moyer said he would not tolerate a hostile work environment. He said
former CEOs at the hospital might have functioned in that manner, but he
said he does not see that happening while Hoce is in charge.
“If the hospital board is not involved, directly involved, and not
challenging areas where there are concerns, and you have this atmosphere of
secrecy or intimidation, that can certainly lead to problems down the
road,” Moyer said.

Hoce said a tragic event can happen at any hospital, leaving it in a
vulnerable situation.

But he is confident Pardee has the right structure in place to prevent a
major disaster and it can learn from the events at Haywood Regional.
“I think it is a wake up call for anyone in health care,” Hoce said. “It
must be a learning and teaching situation. I think in a tragic situation
like that, it is the best you can take out of it.”